Logo of Phnom Penh Post newspaper Phnom Penh Post - Kingdom’s rice sector faces lack of capital

Kingdom’s rice sector faces lack of capital

Content image - Phnom Penh Post
A truck is carrying bags of rice grains in Battambang Province. The industry insiders said a lack of working capital has remained a challenge for the Kingdom’s rice industry. Heng Chivoan

Kingdom’s rice sector faces lack of capital

A lack of working capital has remained a challenge for the Kingdom’s rice industry and has impeded rice export growth for years, industry insiders said.

The comments were made at a meeting between the state-owned Rural Development Bank (RDB) and the Cambodia Rice Federation (CRF) on Monday.

RDB CEO Kao Thach told The Post on Tuesday that among its total funds of more than $160 million, the bank has lent about 70 per cent to the rice sector, which he said was too much for the bank’s ability.

RDB’s funds “are almost exhausted to disburse more loans into the rice sector”, he said, calling on other sources – including the government – for help.

The Kingdom exported 398,586 tonnes of rice in the first nine months of this year, an increase of 2.3 per cent compared to the same period last year, a Secretariat of One Window Service for Rice Export Formality report said.

China became the leading importer of Cambodian rice after the EU imposed tariffs on rice imports from the Kingdom early this year.

The Kingdom exported 157,793 tonnes of rice to China in the first nine months of the year, 135,471 to the EU and 53,347 to the Asean region.

Cambodia Rice Federation (CRF) secretary-general Lun Yeng told The Post on Tuesday that the Kingdom’s rice sector needs more working capital to keep the market strong.

“Normally, in the early harvest season, rice exporters and millers buy paddy for stockpiles, leaving them with a lack of funds by the end of the season.

“The Cambodian rice sector needs about $200 million more in working capital,” he said.

Yeng said the total capital investment in the Kingdom’s rice sector is between $300 million and $400 million.

Heng Pheng, the CEO of Battambang province-based Thmor Korl Rice Import Export Co Ltd, said if the millers had sufficient capital, it would help curtail unofficial exports to neighbouring countries and boost exports to other markets.

“I would like to ask [RDB] and other commercial banks to provide additional loans or at least keep low-interest rates unchanged,” he said.

The price for paddy in Battambang province currently stands at 1,180 riel ($0.29) per kilogramme, compared to 1,350 riel during the same period last year, Pheng said.

“Although the price is now lower than it was last year, it is acceptable to farmers and buyers,” he said.

MOST VIEWED

  • Wing Bank opens new branch in front of Orkide The Royal along Street 2004

    Wing Bank celebrates first anniversary as commercial bank with launch of brand-new branch. One year since officially launching with a commercial banking licence, Wing Bank on March 14 launched a new branch in front of Orkide The Royal along Street 2004. The launch was presided over by

  • Girl from Stung Meanchey dump now college grad living in Australia

    After finishing her foundational studies at Trinity College and earning a Bachelor’s degree from the University of Melbourne in 2022, Ron Sophy, a girl who once lived at the Stung Meanchey garbage dump and scavenged for things to sell, is now working at a private

  • Ministry using ChatGPT AI to ‘ease workload’; Khmer version planned

    The Digital Government Committee is planning to make a Khmer language version of popular artificial intelligence (AI) technology ChatGPT available to the public in the near future, following extensive testing. On March 9, the Ministry of Post and Telecommunications revealed that it has been using the

  • Wat Phnom hornbills attract tourists, locals

    Thanks to the arrival of a friendly flock of great hornbills, Hour Rithy, a former aviculturist – or raiser of birds – in Kratie province turned Phnom Penh tuk tuk driver, has seen a partial return to his former profession. He has become something of a guide

  • PM urges end to ‘baseless’ international Ream base accusations

    Prime Minister Hun Sen urges an end to “baseless” foreign accusations surrounding the development of the Kingdom’s Ream Naval Base, as the US has consistently suggested that the base is being expanded to accommodate a Chinese military presence. Hun Sen renewed his calls while

  • Almost 9K tourists see equinox sunrise at Angkor Wat

    Nearly 9,000 visitors – including 2,226 international tourists – gathered at Angkor Wat on March 21 to view the spring equinox sunrise, according to a senior official of the Siem Reap provinical tourism department. Ngov Seng Kak, director of the department, said a total of 8,726 people visited Angkor Wat to